Reviews Of 15 Marijuana Stocks Before The Marijuana Investor Summit - Part I

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Includes: ACAN, ACGX, ACOL, AERO, AFPW, AGTK, AMMJ, ATTBF, AVTCQ, BABL, BLOZF, BLPG, BNRDF, USMJ
by: Anthony Cataldo

Summary

This is the first of a 10 part series, to be completed and submitted for Seeking Alpha editorial consideration.

Timing is important – the Marijuana Investor Summit will be held in Colorado from April 20 through April 22, 2015.

Expect an increase in marijuana (MJ) sector news releases leading up to, during, and after this event.

The Marijuana Business Conference and Expo will follow the Marijuana Investor Summit, less than 1 month later, on May 19-21, 2015.

I began collecting data for this series on March 27, 2015, and hope you find the series helpful in your MJ sector investment decision-making process.

Important Upcoming Event Dates

The Marijuana Investor Summit is scheduled for April 20, 2015, in Colorado.

It will be followed by the Marijuana Business Conference & Expo on May 19-21, 2015, in Chicago.

All 10 Parts of This Series Will Follow a Broad the Following Format:

  1. First, the firm's name, ticker symbol, and state of incorporation are provided. Recall that more than 50% of the marijuana sector firms, accessing capital in the U.S. capital markets, are incorporated in and are subject to Nevada corporate law. This is a disproportionately large percentage for the marijuana sector, since only a bit above 8% of the overall "market for corporate law" has been captured by the state of Nevada.
  2. Second, the firm's logo, 2-year chart, developed from the OTCMarkets website, through March 27-28, 2015, is provided. I have captured this long-term trend, and identify and note the relatively high price-per-share event date, if it occurred during the February-March-April 2014 period and surrounding the March 21, 2014 event date, when the index of marijuana stocks peaked (See Note the Seasonal Patterns, below).
  3. Third, I provide a link to the firm's website, their business description, working capital position, as provided in their latest, publicly available financials, with some significant fundamentals that I recommend you focus on, before investing in the firm or its securities.
  4. Finally, I provide the firm's 1-month chart, developed and linked to the Seeking Alpha website, where relevant, fundamentals-based articles might be identified and read to "tool up" and decide whether or not you are interested in buying and holding securities from firms in this emerging sector of the U.S. economy, is provided.

Note the Seasonal Patterns

The chart, below, captures a 2-year trend for the MJIC Marijuana Global Composite Index. Note the relative seasonal lows occurring at year-end and during December 2013 and December 2014. This pattern is consistent with (1) individual investor tax loss selling for portfolio "losers" followed by (2) recovery and the January effect. The MJIC index peak is consistent with the March 21, 2014 event date, as follows:

…on March 21, 2014, Federal Court Judge Michael Manson granted an application to medical marihuana patients seeking a temporary injunction to retain the right to produce marihuana for personal use until the court renders a judgement on the constitutionality of the MMPR.

Extraordinary stock price increases attract regulatory body attention. The meteoric rise in the MJIC index was followed by a Securities and Exchange Commission trading halt:

An SEC halt of a leading company and a negative Seeking Alpha (emphasis added) article about another led to widespread selling.

Reviews of the 15 marijuana stocks in this first installment follow:

#1 - AmeriCann, Incorporated (OTCQB:ACAN), formerly, Nevada Health Scan, Incorporated (through April 2014 - see chart, below), is a Delaware corporation. The 2-year chart follows:

The firm's website and business description explains that corporate offices in Denver and Boston are focused on bringing sustainability and efficiency to the design, construction and oversight of highly productive, energy efficient greenhouse cannabis cultivation facilities.

The firm's high closing stock price occurred on July 11-14, 2014 (see above chart) to close at $5.50 per share.

The firm had a positive working capital position as of December 2014, with a market capitalization of $16.8 million as of March 27, 2015. They are generating some revenues, along with relatively large losses. The firm increased shares with a 5 for 1 forward split (ex-date April 10, 2014).

A Securities and Exchange Commission Form 8-K was filed on March 27, 2014, disclosing that the firm borrowed $650,000 from an unrelated, private investor, at 14% per annum. The proceeds from the loan will be used for general corporate purposes and for additional funding of the company's Illinois Medical Cannabis Center (IMMC).

Below is the 1 month chart from the Seeking Alpha website:

#2 - Alliance Creative Group, Incorporated (OTCPK:ACGX) is a Nevada corporation. The 2-year chart follows:

The firm's website and business description defines them as a full-service product Development Agency with an integrated relationship management software company. In addition to the firm's website, investors should review

AllianceCreativeGroup.com, Print4aCause.com, and PeopleVine.com websites.

The firm's high stock price occurred on April 21, 2014 (see above chart) to close at $0.01 per share.

Footnotes to the financial statements describe notes payable, convertible debt, and dilution relating to below market conversion features when debt is exchanged for equity.

Alliance had a positive working capital position as of December 2014, with a market capitalization of $1.1 million on March 27, 2015. The firm is generating revenues and net income for the year ended December 31, 2014, and generated positive cash flows from operations.

Below is the 1 month chart from the Seeking Alpha website:

#3 - Acology, Incorporated (OTCPK:ACOL), formerly, Pinecrest Investment Group, Incorporated (through February 2014 - see chart, below), is a Florida corporation. The 2-year chart follows:

The Acology website suggests that their containers give consumers the ability to store, carry, and dispense items such as pharmaceuticals, herbal remedies, teas and many other solid and/or liquid contents with ease. The firm completed a 1 for 1,000 share reverse split along with their name change, with an ex-date of February 14, 2014.

The, then, thinly traded firm's high closing stock price remained constant from March 20-July 3, 2014 (see above chart) at a closing price of $5.00 per share.

They had a negative working capital position as of September 2014, with a market capitalization of $23.2 million as of March 28, 2015. The firm is generating some revenues, along with relatively large losses.

Acology has related party notes payable (shares could be issued at a 50 percent discount, in the event of default), related party loans, and has issued private placements.

Below is the 1 month chart from the Seeking Alpha website:

#4 - AeroGrow International, Incorporated (OTCQB:AERO) is a Nevada corporation. The 2-year chart follows:

AeroGrow is the creator, manufacturer and marketer of the Miracle-Gro AeroGarden line of indoor gardens for consumer markets worldwide. Headquartered in Boulder, Colorado, AeroGrow is self-described on their website as the leader in the rapidly growing indoor gardening market.

The firm's high closing stock price occurred on March 7, 2014 (see above chart) to close at $9.66 per share.

The firm had a positive working capital position as of December 2014, with a market capitalization of $19.7 million as of March 28, 2015, and is generating revenues, but, recently, has generated net losses.

AeroGrow has related party notes payable.

Below is the 1 month chart from the Seeking Alpha website:

If you click the above link, you will find several Seeking Alpha articles on this firm.

#5 - AlumiFuelPower Corporation (OTCPK:AFPW) is a Wyoming corporation. The 2-year chart follows:

As the website suggests, this is an energy firm, but has had news releases with headlines suggesting that they might provide renewable energy solutions to the cannabis grow market. This firm has had 2 reverse splits: one at 1 for 200 shares and one at 1 for 250 shares, with ex-dates of April 24, 2013, and November 19, 2014, respectively.

The firm had a relatively high closing stock price on March 4, 2014, (see above chart) to close at $0.55 per share.

AlumiFuelPower had a very significant negative working capital position as of September 2014, with a market capitalization of $2,333 as of March 28, 2015.

The firm has no revenues, but has related party accounts payable (management fees, rent, and bonus payable to officers), related party notes payable (most at 8 percent), and related party convertible notes payable (some converted at $0.0002 per share or $0.00005 per share or at a 50 percent discount, and/or are generating interest, for the note holder, at rates ranging from 8% to 12%).

Below is the 1 month chart from the Seeking Alpha website:

#6 - Agritek Holdings, Incorporated (OTCPK:AGTK), formerly, Cannabis Medical Solutions, Incorporated (through July 2011) and MediSwipe (through May 2014), is a Delaware corporation. The 2-year chart follows:

Agritek's website describes the firm as the first fully reporting Company and pioneer within the medicinal marijuana sector, providing innovative patient and agricultural solutions and seeking to become the leader in Compassionate Care Technology and indoor/outdoor agricultural solutions for the recreational cannabis industry.

This firm has a long history of name changes and reverse splits. The most recent reverse split was 1 for 10 with an ex-date of December 11, 2013.

Agritek's high closing stock price occurred on January 6, 2014, with a second highest stock price on March 18, 2014 (see above chart) to close at $0.52 per share.

The firm had a negative working capital position as of September 30, 2014, with a market capitalization of $1.9 million as of March 28, 2015.

Agritek has related party receivables and convertible notes payable (ranging from 8% to 22%, where the latter applies in the case of default). Insignificant revenues are dwarfed by very large management and consulting fees.

Below is the 1 month chart from the Seeking Alpha website:

#7 - Algae International Group, Incorporated (ALGA) is a Nevada corporation. The 2-year chart follows:

Algae, through its operating subsidiary American Seed & Oil Company, Incorporated, is primarily in the business of hemp production in Vermont to supply seed to the expanding hemp farming market, hemp based consumer products market, and hemp based construction material market (see the firm's website).

This firm migrated, changing its state of incorporation from Texas to Nevada in 1999. There have been some name changes and reverse splits, since. A very significant reverse split of 1 for 20,000 shares had an ex-date of May 17, 2013. Algae had a very significant negative working capital position as of December 2014, with a market capitalization of $1.1 million as of March 28, 2015.

The firm has related party advances, related party promissory notes (generating 8% and/or convertible to stock at a 50% discount), and related party convertible notes payable (generating 8% and/or convertible to stock at a 50% discount). There are no revenues.

Below is the 1 month chart from the Seeking Alpha website:

#8 - American Cannabis Company, Incorporated (OTCPK:AMMJ), formerly, Brazil Interactive Media, Incorporated (through October 2014) and NatureWell, Incorporated (through May 2013), is a Delaware corporation. The 2-year chart follows:

American Cannabis owns and operates American Cannabis Consulting, Cube Root Inc. and The Trade Winds Inc. (see the firm's website). A very significant reverse split, by 1 for 8,484 shares, had an ex-date of May 30, 2013, but this occurred before the firm changed its name.

The firm had a positive working capital position as of September 2014, with a market capitalization of $17.8 million as of March 28, 2015.

American Cannabis had net income for the most recently reported quarter. Convertibles can be exercised at $0.08 per share.

Below is the 1 month chart from the Seeking Alpha website:

If you click the above link, you will find a Seeking Alpha article on this firm.

#9 - Abattis Bioceuticals Corporation (OTCQB:ATTBF) is a Canadian corporation. The 2-year chart follows:

The firm's website describes Abattis as a specialty biotechnology company with capabilities through its wholly owned subsidiaries of cultivating, licensing and marketing proprietary ingredients, bio-similar compounds, patented equipment and consulting services to medicinal marijuana markets in North America.

Abattis Bioceuticals enjoyed a high closing stock price on March 21, 2014, at $2.21 per share (see above chart).

On March 9, 2015, Abattis Bioceuticals closed on a non-brokered private placement of 2,365,072 units for $307,460 (Canadian). That is $0.13 per share, in Canadian currency, or a bit above $0.10 per share in U.S. dollars - a 20 percent discount to the U.S. dollar closing price of about $0.123 per share on that date. This discount approximates the commission that a broker might charge the firm to arrange for a comparable placement.

The firm had a modest, negative working capital position as of December 2014, with a market capitalization of $6.1 million as of March 28, 2015. There are some related party debt transactions, a variety of warrants with differing exercise prices and expiration dates, and management and consulting fees are being paid to related parties.

NOTE: Canadian firms and financial data are accessed through SEDAR, the Canadian counterpart to the U.S. Securities and Exchange Commission.

Below is the 1 month chart from the Seeking Alpha website:

#10 - AVT, Incorporated (AVTC) is a Nevada corporation. The 2-year chart follows:

The website describes the firm's primary focus as that of the design and manufacture of vending and product dispensing systems.

AVT enjoyed a relatively high closing stock price on March 11-18, 2014, at $4.28 per share (see above chart).

The firm had a positive working capital position as of June 2014, with a market capitalization of $12.0 million as of March 28, 2015. The firm had a profit during the quarter ended June 2014.

AVT is Securities and Exchange Commission reporting delinquent, as of April 14, 2015, so recent financials, once completed and filed, should be reviewed before considering an investment in this firm.

Below is the 1 month chart from the Seeking Alpha website:

#11 - Buildablock Corporation (OTCPK:BABL) is a Florida corporation. The 2-year chart follows:

Buildablock's website does not suggest that the firm should be characterized as a marijuana stock. The business is described as an online shopping platform, revolutionizing conventional online shopping.

The firm's high closing stock price occurred on March 21, 2014, at $0.188 per share (see above chart).

Buildablock had a negative working capital position as of August 2014, with a market capitalization of $0.3 million as of March 28, 2015. The firm has no revenues, and has a small amount of convertible notes payable to third parties.

Below is the 1 month chart from the Seeking Alpha website:

#12 - Bayport International Holdings, Incorporated (OTCPK:BAYP) is a Nevada corporation. The 2-year chart follows:

Bayport is in the business of developing oil & gas properties, but their high stock price was achieved on February 18, 2014, at $0.26 per share (see above chart), shortly after their February 17, 2014 press release and announcement that they would expand into the legalized marijuana sector (see the firm's website).

The firm had a negative working capital position as of September 2014, with a market capitalization of $2.1 million as of March 28, 2015.

Below is the 1 month chart (for BAYPD) from the Seeking Alpha website:

#13 - Cannabix Technologies, Incorporated (OTCPK:BLOZF), formerly, West Point Resources, Incorporated (through August 2014), is a Canadian corporation. The 2-year chart follows:

Cannabix has the exclusive North American license for the Cannabix Marijuana Breathalyzer- a drug-impairment recognition system (see the firm's website). They have a positive working capital position, but no revenues. They have completed a prototype of their marijuana breathalyzer and are testing it.

NOTE: Canadian firms and financial data are accessed through SEDAR, the Canadian counterpart to the U.S. Securities and Exchange Commission.

Below is the 1 month chart from the Seeking Alpha website:

#14 - Blue Line Protection Group, Incorporated (OTCPK:BLPG), formerly, Engraving Masters, Incorporated (through May 2014), is a Nevada corporation. The 2-year chart follows:

Blue Line Protection Group provides armed protection, financial solutions; logistics and compliance services for businesses engaged in the legal cannabis industry (see the firm's website). The company's security personnel have significant experience in the U.S. Armed Forces, Special Forces, and law enforcement. Blue Line provides top-tier asset protection from "seed-to-sale," currently serving marijuana dispensaries in Colorado, with operations in Washington and Nevada.

The firm's high closing stock price occurred on April 1, 2014, at $25.00 per share (see above chart).

Blue LIne had a negative working capital position as of September 2014, with a market capitalization of $31.1 million as of March 28, 2015. There are related party notes payable and related party warrants and options.

Below is the 1 month chart from the Seeking Alpha website:

If you click the above link, there are several Seeking Alpha articles on this firm.

#15 - Bedrocan Cannabis Corporation (OTC:BNRDF) is a Canadian corporation. The 2-year chart follows:

Bedrocan produces pharmaceutical grade medical marijuana, with more than 13 years of growing expertise through Dutch partner and shareholder Bedrocan BV (see the firm's website). The firm had a positive working capital position as of October 2014.

The firm had positive cash flows from operations, revenues, and a favorable gross profit margin percentage. Details of stock options, stock-based compensation, warrants, and related party transactions are provided in the notes to the firm's financial statements.

NOTE: Canadian firms and financial data are accessed through SEDAR, the Canadian counterpart to the U.S. Securities and Exchange Commission.

Below is the 1 month chart from the Seeking Alpha website:

Summary

With the single exception of Cannabix, the price-per-share for all 15 stocks has been in decline, when viewed in the content of the 2-year chart. The Investor Summit and the Marijuana Business Conference and Expo scheduled for April and May, respectively, are not likely to represent event dates, in and of themselves, that will result in an economically significant, positive sector reaction, but individual firms are likely to make complementary news announcements during this period. Use this article, and those that follow in this series, as a source of historical reference to quickly digest these announcements, in context, before making a decision to buy and hold these stocks.

Disclosure: The author is long BLOZF.

The author wrote this article themselves, and it expresses their own opinions. The author is not receiving compensation for it (other than from Seeking Alpha). The author has no business relationship with any company whose stock is mentioned in this article.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.